Hold cities accountable on pension costs

Public employee pensions continue to perplex lawmakers, who keep applying Band-Aids to a system that should be in intensive care — or on the transplant list.

Transparency is key. If people knew the seriousness of the problem, they’d be more inclined to pressure their elected representatives to take real action.

That’s why we applaud proposed legislation in Congress that would take away the rights of cities and states to issue tax-exempt bonds unless they first come clean about the true costs of their pension plans — and their ability to pay for them.

The bill seeks to prevent more municipal bankruptcies of the kind that have rocked several California cities — bankruptcies in which public employee retirement benefits played a key role. Stockton, for example, owes $900 million to the California Public Employees’ Retirement System to cover pension promises, the city’s single largest debt. Stockton has kept up with pension payments while it has defaulted on hundreds of millions of dollars’ worth of municipal bonds, triggering a debate over which debts should have legal priority. Labor groups say a promise is a promise, but if the outcome — which may be decided by the Supreme Court — goes labor’s way, cities could be hamstrung in their attempts to obtain funding to build public works.

Sponsors of the measure say they want to send a message to local governments: Don’t promise more than you can deliver. That’s a good message, and one that deserves teeth.